Severance Agreement Landmines

Posted on Jan 20, 2014 2:00pm PST

When presented with a severance agreement, most people are already in a vulnerable state. Often people did not see the termination coming, or even if they did, had many years of service invested with the company. Most are concerned about the future, where they will be able to find their next job, and how they will support their families. Consequently, people often sign severance agreements not really knowing what rights they are giving up and what hidden dangers lie within these agreements.

For example, most people are unaware that Florida Reemployment Assistance laws now consider severance pay as a form of back pay and are deducting it from reemployment assistance benefits. So a nominal severance package will not necessarily provide much extra compensation unless the employee is facing an extended period of unemployment. Even then, with Congress' recent refusal to extend unemployment benefits, a small severance package will usually not provide much support during a long break from employment.

However, most surprising is that people offered a severance package think that their employer is simply being nice, or wanting to show their appreciation for the employee's years of service. Nothing could be further from the truth. More often than not, the employer considers these agreements and the release of claims contained within them to have significant value and allow them to nip a potential lawsuit in the bud before the employee has a chance to talk to an attorney, or fully consider potential illegalities regarding their termination. Severance agreements are to protect the employer, not the employee. Anyone offered such an agreement, regardless of the terms, should carefully consider and weigh all their options before signing their rights away. Often there are terms that can be negotiated, and in some instances a serious law violation exists that may never require the employer to be brought to justice for its wrongdoing if the agreement is signed.

When
You're

Ready to talk

The information on this website is for general information purposes only.
Nothing on this site should be taken as legal advice for any individual
case or situation. This information is not intended to create, and receipt
or viewing does not constitute, an attorney-client relationship.